Spanish tax warnings

The Spanish Tax Authority continues its fiscal fraud campaign

The Spanish Tax Authority is continuing to target tax evaders and has announced further measures in its fiscal fraud campaign. Over the past few years we have continued to see a number of different strategies being used. Cross-referencing electricity consumption with the Land Registry, the circulation of warning letters and now a strong media campaign to ensure that no one can be in doubt that the tax man is out on the streets to track people down who don’t comply.

Nothing seems to be sacrosanct in the last offensive announced. According to information released by the Spanish Tax Authority they will be targeting fiestas, weddings and other celebrations to make sure that all items have been paid for correctly and in line with the 2,500 € upper cash limit.

The upper cash limit was introduced last year in order to tackle undeclared transactions that should be subject to tax. However, since the announcement there was uncertainty about how exactly this new legislation would be policed.

Weddings, baptisms, communions are some of the events that are specified as worthy of further investigation. However, this headline grabbing announcement is only the tip of the iceberg. The image presented is of the tax inspector out on foot looking for those who flout the Spanish tax law.

In this article we report on the announcements from the Agencia Tributaria (Spanish Tax Authority). It should be noted that the publicity is keen for word of mouth to be seen as an important method of alerting people to the new measures.

Schools

It is suggested that schools will be asked to inform the Spanish Tax Office about the type of payments made to outside providers including those for lunchtime services, school transport and parent/ teacher associations.

Weddings and celebratory events

According to the publicised information, even celebratory events won’t be immune to further scrutiny. For example, those arranging to get married will have to indicate what services they are using and how they are paying for them.

Community of owners

From 1st January 2014, communities of owners will be obliged to declare their transactions with third parties of above 3,005 euros.

The Tax office have announced that they will be visiting communities in order to obtain information about providers of services who are on their books. They might be expected to explore the types of payment made to plumbers, carpenters, painters, security firms and administrators.

Landlords

Included in the latest measures is an increased focus on people who might be renting out their property but do not pay Spanish rental tax. The Tax Authority have declared that they will be examining websites such as those of estate agents to track people down.

Completed investigations

However sceptical we might be about how this will look in practice, the Spanish tax office is keen to demonstrate that ‘on foot’ investigations are on the increase. They tell us that in 2011 there were 11,964 inspection visits which almost doubled in 2012 to 20,446 visits. Next year they are promising a similar increase.

The Spanish Tax Authority is anticipating that as news of its increased vigilance spreads so will people’s willingness to make sure they are paying the right taxes and handling their transactions correctly.